Sunday, April 04, 2010

The New Moderation

While the house flippers return, the national media runs stories on daytraders, $20 million houses get scooped up in Greenwich, commuters are again dropping $200 on helicopter rides to Manhattan, oil winks at $90, and yet another asset bubble (stocks) builds....the Fed promises to stay at zero indefinitely.

Compared to the last round of exuberance, this one might have a few extra twists. More soon.

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Meanwhile the last two day debt binge at the US Treasury totaled $254.4BIL USD and sent the US PUBLIC DEBT up another $80.31BIL USD to $12.7TRIL USD.

Next are the bailouts and promises that the US Taxpayer is on the hook for. The current total comes to $17.214TRIL USD in "total potential support including implied guarantees" for US banks and corporations and private citizens.

LINK: http://www.sitemason.com/files/foZeWA/bailouttallymar2010.pdf

So here we are sitting on a combined "LIABILITY BUBBLE" of $29.9TRIL USD. I would say that whatever "bubble" the US stock markets might or might not work up will pale in comparison to the currently sky high US LIABILITY BUBBLE. What is a US Dollar? A US Dollar is a monetary MBS(M-MBS) ... a "debt derivative" with yet another inflated Aaa rating.

Is it possible that we'll ever get to a system regulated into at least some semblance of rationality rather than this casino style gaming we've been suffering under?

I think one helpful approach would be to bring game design into the system so that the thrill of cheating the system is funneled into positive activities that benefit everyone and makes destructive cheating less profitable. The system needs to take into account human nature and put it to use, not just ignore it and assume, as Greenspan has, that we can be rational actors if left alone, unregulated.

Though with so many invested so heavily in propping up this ramshackle wealth disparity generator, it'll be next to impossible to start over with a clean slate. However, next to impossible still means there's some hope.

It the collective economy philosophy has ossified. Whats the main reason though? Is it that individuals feel helpless and must just continue to work the jobs they can find and buy whats offered, or do we simply lack ideas of what to do next?